¹ Schedules at the end of this release contain reconciliations of
reported GAAP to non-GAAP metrics.

Q4 2017 Consolidated Summary: Change vs. Prior Year

Reported (GAAP)

Adjusted (Non-GAAP)¹

Currency Neutral (Non-GAAP)¹

Sales

Operating Profit

EPS

Sales

Operating Profit

EPS

Sales

Operating Profit

EPS

Consolidated

12%

17%

(150)%

12%

6%

14%

10%

4%

16%

Acquisition Impact

3%

(1)%

(1)%

3%

(1)%

(1)%

3%

(1)%

(1)%

¹ Schedules at the end of this release contain reconciliations of
reported GAAP to non-GAAP metrics

Management Commentary

“2017 was another notable year in terms of progress, both strategically
and in regards to our financial performance,” said Chairman and CEO
Andreas Fibig. “We continued to advance our long-term strategy that will
enable us to deliver strong returns for our shareholders. We
successfully launched three new captive fragrance ingredients,
commercialized three natural modulators, expanded our core list
participation with several key accounts, and launched Tastepoint℠ by IFF
- a fully dedicated organization within IFF designed to service
middle-market customers in North America. In addition, we continued to
make progress towards our M&A ambition, adding nearly $90 million in
expected annualized revenue with the acquisitions of Fragrance Resources
& PowderPure.

“In terms of full year financial performance, we achieved currency
neutral growth across all of our key metrics. Both business units
successfully delivered solid top-line growth – with a marked
acceleration in the second half of 2017. Bottom-line performance was
supported by strong benefits from cost and productivity initiatives and
value-enhancing acquisitions.”

Full Year 2017 Consolidated Financial Highlights

Reported net sales for the full year totaled $3.4 billion, an increase
of 9% from $3.1 billion in 2016. Excluding the impact of foreign
exchange, currency neutral sales also increased 9% over the prior
year, including approximately five percentage points related to our
recent acquisitions.

Reported operating profit for the full year was $581 million versus
$567 million reported in 2016, an increase of 2%. Excluding the impact
of foreign exchange and those items that affect comparability,
currency neutral adjusted operating profit grew 5%, principally driven
by volume growth, the benefits associated with cost and productivity
initiatives and acquisitions.

Reported earnings per share (EPS) for the full year was $3.72 per
diluted share versus $5.05 per diluted share reported in 2016.
Excluding the impact of foreign exchange and those items that affect
comparability, currency neutral adjusted EPS improved 9%, driven by
adjusted operating profit growth, a more favorable year-over-year
effective tax rate, and lower year-over-year shares outstanding.

U.S. Tax Reform

On December 22, 2017, the U.S. government enacted comprehensive tax
reform commonly referred to as the Tax Cuts and Jobs Act (the “Tax
Act”). As a result, the Company recording a provisional net charge of
$139 million in the quarter ended December 31, 2017, which includes a
transition tax on the Company’s historic unremitted foreign earnings
and the revaluation of the Company’s net deferred tax assets.

On a reported basis, sales increased 9%, or $135.6 million, to $1.6
billion. Currency neutral sales grew 10% driven by growth in all
categories, and the contribution of sales related to the acquisitions
of David Michael and PowderPure.

EAME increased 6% on a reported basis and 8% on a currency neutral
basis, with growth in Central, Southern, Eastern and Western Europe as
well the Middle East and Africa. Growth was achieved across all
categories, led by strong performances in Dairy and Beverage.

North America improved 23% reflecting additional sales related to
acquisitions as well as mid-single-digit growth on an organic basis.
Performance was also driven by strong new wins in Savory.

Latin America increased 7% on a reported basis and 6% on a currency
neutral basis led by double-digit growth in the South Cone and Andean
Pact sub-regions. Growth was achieved in all categories, led by strong
new wins in Savory and Dairy.

Greater Asia increased 1% on a reported and on a currency neutral
basis, with strong double-digit growth in India and Thailand. On a
category basis, growth was strongest in Beverage, Savory and Sweet.

Flavors segment profit increased 11% on a reported basis and 14% on a
currency neutral basis, driven by volume growth, the contribution of
acquisitions and the benefits from productivity initiatives.

Fragrances Business Unit

On a reported basis, sales increased 9%, or $146.7 million, to $1.8
billion. Currency neutral sales also improved 9%, with broad-based
contributions from the organic business and sales related to the
acquisition of Fragrance Resources.

Fine Fragrances increased 18% on a reported basis and 16% on a
currency neutral basis, inclusive of additional sales related to the
acquisition of Fragrance Resources. Results were driven by strong
double-digit growth in EAME, North America and Greater Asia.

Consumer Fragrances grew 7% on a reported and currency neutral basis
led by growth in Home Care, Fabric Care and Personal Wash. On a
geographic basis, growth was achieved in all regions, led by growth in
EAME and North America.

Fragrance Ingredients grew 8% on a reported and currency neutral
basis, led by strong growth in LATAM and EAME as well as double-digit
growth in Cosmetic Active Ingredients.

Fragrances segment profit remained constant on a reported basis and
declined 1% on a currency neutral basis as volume growth, the benefits
from cost and productivity initiatives and the contribution of
acquisitions was offset by unfavorable price to input costs, and
higher research, selling and administrative expenses, including higher
incentive compensation.

EAME increased 8% on a reported basis and 5% on a currency neutral
basis led by strong growth in Middle East, Africa and Central,
Southern and Eastern Europe.

North America grew 9% driven by strong double-digit growth in Savory
as well as additional sales related to the acquisition of PowderPure.

Latin America increased 5% on a reported and 6% on a currency neutral
basis led by growth in the South Cone sub-region.

Greater Asia increased 3% on a reported and 2% on a currency neutral
basis principally driven by strong growth in India and the Asean
region.

Flavors segment profit grew 10% on a reported basis and currency
neutral basis, driven by volume growth and the benefits from
productivity initiatives.

Fragrances Business Unit

On a reported basis, sales increased 18%, or $67.8 million, to $452.7
million, while currency neutral sales improved 15%. Growth was
broad-based, with double-digit increases in all regions.

Fine Fragrances grew 31% on a reported basis and 27% on a currency
neutral basis, inclusive of additional sales related to the
acquisition of Fragrance Resources. All regions achieved strong
double-digit growth.

Consumer Fragrances improved 14% on a reported and 12% on a currency
neutral basis, inclusive of additional sales related to the
acquisition of Fragrance Resources. Performance was also driven by
strong growth in Personal Wash, Home Care and Toiletries. On a
geographic basis, growth was strongest in North America and Greater
Asia – both increasing double-digits – as well as increases in EAME
and Latin America.

Fragrance Ingredients grew 17% on a reported basis and 14% on a
currency neutral basis driven by strong growth in Latin America, North
America and Greater Asia as well as double-digit growth in Cosmetic
Active Ingredients.

Fragrances segment profit grew 4% on a reported basis, and remained
constant on a currency neutral basis as volume growth and the benefits
from productivity initiatives were offset by softer mix, unfavorable
price to input costs and higher research, selling and administrative
expenses, including higher incentive compensation.

FY 2018 Financial Guidance: Percent Change vs. Prior Year

Management Commentary

Mr. Fibig continued, “As we enter 2018 – recognizing that uncertainty
remains in the operating environment – we are targeting growth across
all of our key financial metrics. We are doing so by taking action to
accelerate sales growth in advantaged categories, deliver innovation
that is truly differentiated and generate higher returns via continued
cost and productivity initiatives. This in turn is expected to lead to
currency neutral adjusted operating profit growth in line with our
long-term target, absent of a two percentage point headwind related to a
supply issue of a commonly used raw material, and ultimately generate
strong returns for our shareholders.”

The Company’s full year 2018 guidance:

Currency Neutral

FX Impact1

Adjusted2

Sales

3.0% - 5.0%

~3.0%

6.0% - 8.0%

Operating Profit

5.0% - 7.0%

~1.5%

6.5% - 8.5%

EPS

4.0% - 6.0%

~1.5%

5.5% - 7.5%

1 See Use of Non-GAAP Financial Measures

2 Excludes items impacting comparability

U.S. Tax Reform

Based on our current assessment and understanding of the Tax Act and
the Company’s current global operating structure, the Company believes
its effective tax rate will be approximately 21% in 2018. The ultimate
impact of the Tax Act may differ from this estimate, due to, among
other things, changes in interpretations and assumptions the Company
has made, additional guidance that may be issued by the taxing
authorities as well as operating and/or structural changes that the
Company may take as a result of the Tax Act.

FASB Amendment: Compensation - Retirement Benefits

In March 2017, the FASB issued amendments to the Compensation -
Retirement Benefits guidance which requires employers that present a
measure of operating income in their statement of income to include
only the service cost component of net periodic pension cost and
postretirement costs in operating expenses. Interest cost, asset
returns and amortized gains and losses will now be included in Other
Income and Expense.

In conformity with this guideline, and effective in 2018, the Company
expects an increase in operating expenses of approximately $30 million
for 2018 as compared to the presentation prior to the change. The
amounts of the increases in operating expenses in fiscal year 2017 and
2016, which will be revised in 2018, were $30 million and $15 million,
respectively. In each case, the increase in operating expenses is
offset by increased income in Other Income/Expense. The change does
not impact Net Income or EPS in any period.

A copy of the Company’s Annual Report on Form 10-K will be available on
its website at www.iff.com
or at sec.gov by February 27, 2018.

Audio Webcast

A live webcast to discuss the Company’s fourth quarter and full year
2017 financial results will be held on February 15, 2018, at 10:00 a.m.
ET. Investors may access the webcast and accompanying slide presentation
on the Company's IR website at ir.iff.com. For those unable to listen to
the live webcast, a recorded version will be made available on the
Company's website approximately one hour after the event and will remain
available on IFF’s website for one year.

This press release includes “forward-looking statements” under the
Federal Private Securities Litigation Reform Act of 1995, including
statements regarding our outlook in 2018, including accelerated sales
and profitable growth, the expected impact of and benefits from cost and
productivity initiatives, the impact of the Tax Act on 2018 the
Company’s effective tax rate, and the impact of our actions on value
creation for our shareholders. These forward-looking statements are
qualified in their entirety by cautionary statements and risk factor
disclosures contained in the Company’s Securities and Exchange
Commission filings, including the Company’s Annual Report on Form 10-K
filed with the Commission on February 28, 2017. The Company wishes to
caution readers that certain important factors may have affected and
could in the future affect the Company’s actual results and could cause
the Company’s actual results for subsequent periods to differ materially
from those expressed in any forward-looking statements made by or on
behalf of the Company. With respect to the Company’s expectations
regarding these statements, such factors include, but are not limited
to: (1) macroeconomic trends affecting the emerging markets; (2) the
Company’s ability to implement and adapt its refreshed Vision 2020
strategy; (3) the Company’s ability to successfully identify and
complete acquisitions in line with its Vision 2020 strategy, and to
realize the anticipated benefits of those acquisitions; (4) the
Company’s ability to realize the benefits of its cost and productivity
initiatives, (5) the impact of the disruption in supply of citral from
BASF on the price and availability of citral in 2018; (6) the Company’s
ability to effectively compete in its market, and to successfully
develop new, cost-effective and competitive products that appeal to its
customers and consumers; (7) changes in consumer preferences and demand
for the Company’s products or a decline in consumer confidence and
spending; (8) the Company’s ability to benefit from its investments and
expansion in emerging markets; (9) the impact of recently enacted U.S.
tax legislation on the Company’s effective tax rate in 2018 and beyond;
(10) the impact of currency fluctuations or devaluations in the
principal foreign markets in which it operates; (11) the economic and
political risks associated with the Company’s international operations,
including challenging economic conditions in China and Latin America;
(12) the impact of any failure or interruption of the Company’s key
information technology systems or a breach of information security; (13)
the Company’s ability to attract and retain talented employees; (14) the
Company’s ability to comply with, and the costs associated with
compliance with U.S. and foreign environmental protection laws; (15) the
Company’s ability to realize expected cost savings and efficiencies from
its profitability improvement initiative and other optimization
activities; (16) volatility and increases in the price of raw materials,
energy and transportation; (17) price realization in a rising input cost
environment (18) fluctuations in the quality and availability of raw
materials; (19) the impact of a disruption in the Company’s supply chain
or its relationship with its suppliers; (20) any adverse impact on the
availability, effectiveness and cost of the Company’s hedging and risk
management strategies; (21) the Company’s ability to successfully manage
its working capital and inventory balances; (22) uncertainties regarding
the outcome of, or funding requirements related to litigation or
settlement of pending litigation uncertain tax positions or other
contingencies; (23) the effect of legal and regulatory developments, as
well as restrictions or costs that may be imposed on the Company or its
operations by U.S. and foreign governments; (24) adverse changes in
federal, state, local and international tax legislation or policies,
including with respect to transfer pricing and state aid, and adverse
results of tax audits, assessments, or disputes; and (25) changes in
market conditions or governmental regulations relating to our pension
and postretirement obligations. New risks emerge from time to time and
it is not possible for management to predict all such risk factors or to
assess the impact of such risks on the Company’s business. Accordingly,
the Company undertakes no obligation to publicly revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise.

Use of Non-GAAP Financial Measures

We provide in this press release (1) Currency Neutral Sales, (2)
Adjusted Operating Profit and Currency Neutral Adjusted Operating Profit
and (3) Adjusted EPS and Currency Neutral Adjusted EPS, which exclude
restructuring costs and other significant items of a non-recurring
and/or nonoperational nature such as legal charges/credits, gain on sale
of assets, operational improvement initiatives and acquisition related
costs (often referred to as “Items Impacting Comparability”) and, with
respect to the currency neutral items, the impact of foreign currency
movements. We provide these metrics as we believe that they are useful
in providing period to period comparisons of the results of our
operational performance. When we provide our expectations for our
currency neutral metrics in our full year 2018 guidance, we estimate the
anticipated FX impact by comparing prior year results to the prior year
results restated at exchange rates in effect for the current year based
on the currency of the underlying transaction. When we provide our
expectations for our Adjusted Operating Profit and our Adjusted EPS in
our full year 2018 guidance, the closest corresponding GAAP measures
(expected reported Operating Profit and EPS) and a reconciliation of the
differences between the non-GAAP expectation and the corresponding GAAP
measure generally are not available without unreasonable effort due to
inherent difficulty of forecasting the timing and amount of reconciling
items that would be excluded from the GAAP measure in the relevant
future period and the relevant tax impact of such reconciling items on
EPS. The variability of the excluded items may have a significant, and
potentially unpredictable, impact on our future GAAP results. Currency
Neutral Sales, Adjusted Operating Profit, Currency Neutral Adjusted
Operating Profit, Adjusted EPS and Currency Neutral Adjusted EPS should
not be considered in isolation or as substitutes for analysis of the
Company’s results under GAAP and may not be comparable to other
companies’ calculation of such metrics.

Meet IFF

International Flavors & Fragrances Inc. (NYSE:IFF) (Euronext Paris: IFF)
is a leading innovator of sensorial experiences that move the world. At
the heart of our company, we are fueled by a sense of discovery,
constantly asking “what if?”. That passion for exploration drives us to
co-create unique products that consumers taste, smell, or feel in fine
fragrances and beauty, detergents and household goods, as well as
beloved foods and beverages. Our 7,300 team members globally take
advantage of leading consumer insights, research and development,
creative expertise, and customer intimacy to develop differentiated
offerings for consumer products. Learn more at www.iff.com,
Twitter
, Facebook,
Instagram,
and LinkedIn.

International Flavors & Fragrances Inc.

Consolidated Income Statement

(Amounts in thousands except per share data)

(Unaudited)

Three Months Ended December 31,

Year Ended December 31,

2017

2016

% Change

2017

2016

% Change

Net sales

$

854,625

$

762,559

12

%

$

3,398,719

$

3,116,350

9

%

Cost of goods sold

496,935

435,607

14

%

1,919,718

1,717,280

12

%

Gross profit

357,690

326,952

9

%

1,479,001

1,399,070

6

%

Research and development

75,063

63,210

19

%

286,026

254,263

12

%

Selling and administrative

139,597

157,851

(12

)%

557,311

566,224

(2

)%

Restructuring and other charges

5,528

(1,700

)

(425

)%

19,711

(1,700

)

(1,259

)%

Amortization of acquisition-related intangibles

10,366

7,105

46

%

34,694

23,763

46

%

Gain on the sale of fixed assets

(64

)

(7,839

)

(99

)%

(184

)

(10,836

)

(98

)%

Operating profit

127,200

108,325

17

%

581,443

567,356

2

%

Interest expense

15,779

12,339

28

%

65,363

52,989

23

%

Other (income) expense, net

(3,771

)

(7,395

)

(49

)%

(20,965

)

(9,350

)

124

%

Pretax income

115,192

103,381

11

%

537,045

523,717

3

%

Income taxes

155,347

23,463

562

%

241,380

118,686

103

%

Net (loss) income

$

(40,155

)

$

79,918

(150

)%

$

295,665

$

405,031

(27

)%

(Loss) earnings per share - basic

$

(0.51

)

$

1.00

$

3.73

$

5.07

(Loss) earnings per share - diluted

$

(0.51

)

$

1.00

$

3.72

$

5.05

Average shares outstanding

Basic

79,056

79,399

79,070

79,648

Diluted

79,056

79,713

79,370

79,981

International Flavors & Fragrances Inc.

Condensed Consolidated Balance Sheet

(Amounts in thousands)

(Unaudited)

December 31, 2017

December 31, 2016

Cash & cash equivalents

$

368,046

$

323,992

Receivables

663,663

550,658

Inventories

649,448

592,017

Other current assets

215,387

142,347

Total current assets

1,896,544

1,609,014

Property, plant and equipment, net

880,580

775,716

Goodwill and other intangibles, net

1,572,075

1,365,906

Other assets

249,727

266,348

Total assets

$

4,598,926

$

4,016,984

Bank borrowings and overdrafts, and

current portion of long-term debt

$

6,966

$

258,516

Other current liabilities

761,802

639,781

Total current liabilities

768,768

898,297

Long-term debt

1,632,186

1,066,855

Non-current liabilities

508,678

420,698

Shareholders' equity

1,689,294

1,631,134

Total liabilities and shareholders' equity

$

4,598,926

$

4,016,984

International Flavors & Fragrances Inc.

Consolidated Statement of Cash Flows

(Amounts in thousands)

(Unaudited)

Year Ended December 31,

2017

2016

Cash flows from operating activities:

Net income

$

295,665

$

405,031

Adjustments to reconcile to net cash provided by operations:

Depreciation and amortization

117,967

102,469

Deferred income taxes

58,889

14,350

Gain on disposal of assets

(184)

(10,836)

Stock-based compensation

26,567

24,587

Pension contributions

(39,298)

(46,347)

Litigation settlement

(56,000)

—

Foreign currency gain on liquidation of entity

(12,217)

—

Changes in assets and liabilities, net of acquisitions:

Trade receivables

(68,851)

(21,544)

Inventories

(18,911)

15,452

Accounts payable

29,114

(7,642)

Accruals for incentive compensation

19,144

12,133

Other current payables and accrued expenses

22,679

49,103

Other assets

(3,866)

(1,067)

Other liabilities

20,058

14,450

Net cash provided by operating activities

390,756

550,139

Cash flows from investing activities:

Cash paid for acquisitions, net of cash received

(192,328)

(236,836)

Additions to property, plant and equipment

(128,973)

(126,412)

Proceeds from disposal of assets

16,139

6,856

Maturity of net investment hedges

1,434

637

Proceeds from life insurance contracts

3,798

292

Net cash used in investing activities

(299,930)

(355,463)

Cash flows from financing activities:

Cash dividends paid to shareholders

(206,118)

(184,897)

Decrease in revolving credit facility borrowings and overdrafts

(4,499)

(131,074)

Proceeds from issuance of long-term debt

498,250

555,559

Deferred financing costs

(5,373)

(5,788)

Repayments of debt

(250,000)

(125,000)

Loss on pre-issuance hedges

(5,310)

(3,244)

Proceeds from issuance of stock under stock plans

329

813

Employee withholding taxes paid

(11,768)

(13,353)

Purchase of treasury stock

(58,069)

(127,443)

Net cash used in financing activities

(42,558)

(34,427)

Effect of exchange rates changes on cash and cash equivalents

(4,214)

(18,245)

Net change in cash and cash equivalents

44,054

142,004

Cash and cash equivalents at beginning of year

323,992

181,988

Cash and cash equivalents at end of period

$

368,046

$

323,992

International Flavors & Fragrances Inc.

Business Unit Performance

(Amounts in thousands)

(Unaudited)

Three Months Ended December 31,

Year Ended December 31,

2017

2016

2017

2016

Net Sales

Flavors

$

401,880

$

377,656

$

1,632,166

$

1,496,525

Fragrances

452,745

384,903

1,766,553

1,619,825

Consolidated

854,625

762,559

3,398,719

3,116,350

Segment Profit

Flavors

$

85,482

$

77,579

$

375,208

$

337,242

Fragrances

75,329

72,376

335,412

334,220

Global Expenses

(15,986)

(13,936)

(63,180)

(48,487)

Operational Improvement Initiatives

(329)

(502)

(1,802)

(2,402)

Acquisition Related Costs

113

(10,161)

(20,389)

(12,195)

Integration Related Costs

(1,676)

—

(4,179)

—

Legal Charges/Credits

—

(25,000)

(1,000)

(48,518)

Tax Assessment

—

—

(5,331)

—

Restructuring and Other Charges

(5,528)

151

(19,711)

(322)

Gain on Sale of Assets

64

7,818

184

7,818

FDA Mandated Product Recall

(7,500)

—

(11,000)

—

UK Pension Settlement Charges

(2,769)

—

(2,769)

—

Operating profit

127,200

108,325

581,443

567,356

Interest Expense

(15,779)

(12,339)

(65,363)

(52,989)

Other income (expense), net

3,771

7,395

20,965

9,350

Income before taxes

$

115,192

$

103,381

$

537,045

$

523,717

Operating Margin

Flavors

21.3 %

20.5 %

23.0 %

22.5 %

Fragrances

16.6 %

18.8 %

19.0 %

20.6 %

Consolidated

14.9 %

14.2 %

17.1 %

18.2 %

International Flavors & Fragrances Inc.

Sales Performance by Region and Category

(Unaudited)

Fourth Quarter 2017 vs. 2016

Percentage Change in Sales by Region of Destination

Fine

Consumer Fragrances

Ingredients

Total Frag.

Flavors

Total

North America

Reported

63%

19%

28%

29%

9%

17%

EAME

Reported

25%

16%

5%

19%

8%

12%

Currency Neutral

18%

9%

0%

12%

5%

7%

Latin America

Reported

20%

7%

60%

10%

5%

10%

Currency Neutral

17%

7%

60%

10%

6%

10%

Greater Asia

Reported

30%

14%

16%

15%

3%

8%

Currency Neutral

30%

14%

15%

14%

2%

7%

Total

Reported

31%

14%

17%

18%

6%

12%

Currency Neutral

27%

12%

14%

15%

5%

10%

2017 vs. 2016

Percentage Change in Sales by Region of Destination

Fine

Consumer Fragrances

Ingredients

Total Frag.

Flavors

Total

North America

Reported

21%

10%

3%

13%

23%

17%

EAME

Reported

22%

11%

10%

15%

6%

10%

Currency Neutral

22%

10%

10%

14%

8%

11%

Latin America

Reported

4%

1%

37%

2%

7%

5%

Currency Neutral

-1%

1%

36%

0%

6%

4%

Greater Asia

Reported

23%

5%

1%

6%

1%

3%

Currency Neutral

25%

6%

2%

6%

1%

3%

Total

Reported

18%

7%

8%

9%

9%

9%

Currency Neutral

16%

7%

8%

9%

10%

9%

Currency neutral growth is calculated by translating prior year sales
at the exchange rates used for the corresponding 2017 period.

International Flavors & Fragrances Inc.

GAAP to Non-GAAP Reconciliation

Foreign Exchange Impact

(Unaudited)

Q4 Consolidated

Sales

Operating Profit

EPS

% Change - Reported (GAAP)

12%

17%

-150%

Items Impacting Comparability

0%

-11%

165%*

% Change - Adjusted (Non-GAAP)

12%

6%

14%

Currency Impact

-2%

-2%

1%*

% Change - Currency Neutral (Adjusted)

10%

4%

16%

Q4 Flavors

Sales

Segment Profit

% Change - Reported (GAAP)

6%

10%

Currency Impact

-1%

0%

% Change - Currency Neutral

5%

10%

Q4 Fragrances

Sales

Segment Profit

% Change - Reported (GAAP)

18%

4%

Currency Impact

-3%

-4%

% Change - Currency Neutral

15%

0%

FY 2017 Consolidated

Sales

Operating Profit

EPS

% Change - Reported (GAAP)

9%

2%

-26%

Items Impacting Comparability

0%

2%

34%

% Change - Adjusted (Non-GAAP)

9%

4%

8%

Currency Impact

0%

1%

2%*

% Change - Currency Neutral (Adjusted)

9%

5%

9%

FY 2017 Flavors

Sales

Segment Profit

% Change - Reported (GAAP)

9%

11%

Currency Impact

1%

3%

% Change - Currency Neutral

10%

14%

FY 2017 Fragrances

Sales

Segment Profit

% Change - Reported (GAAP)

9%

0%

Currency Impact

0%

-1%

% Change - Currency Neutral

9%

-1%

*Item does not foot due to rounding

International Flavors & Fragrances Inc.GAAP to
Non-GAAP Reconciliation(Amounts in thousands)(Unaudited)

The following information and schedules provide reconciliation
information between reported GAAP amounts and non-GAAP certain adjusted
amounts. This information and schedules are not intended as, and should
not be viewed as, a substitute for reported GAAP amounts or financial
statements of the Company prepared and presented in accordance with GAAP.

Reconciliation of Gross Profit

(DOLLARS IN THOUSANDS)

Fourth Quarter

2017

2016

Reported (GAAP)

$

357,690

$

326,952

Operational Improvement Initiatives (a)

329

502

Acquisition Related Costs (b)

(194

)

6,759

Integration Related Costs (c)

163

—

Restructuring and Other Charges (e)

—

185

FDA Mandated Product Recall (g)

7,500

—

Adjusted (Non-GAAP)

$

365,488

$

334,398

Reconciliation of Selling and Administrative Expenses

(DOLLARS IN THOUSANDS)

Fourth Quarter

2017

2016

Reported (GAAP)

$

139,597

$

157,851

Operational Improvement Initiatives (a)

—

—

Acquisition Related Costs (b)

(81

)

(3,402

)

Integration Related Costs (c)

(1,390

)

—

Legal Charges/Credits (d)

—

(25,000

)

Restructuring and Other Charges (e)

—

(1,364

)

UK Pension Settlement Charges (h)

(1,882

)

—

Adjusted (Non-GAAP)

$

136,244

$

128,085

Reconciliation of Operating Profit

(DOLLARS IN THOUSANDS)

Fourth Quarter

2017

2016

Reported (GAAP)

$

127,200

$

108,325

Operational Improvement Initiatives (a)

329

502

Acquisition Related Costs (b)

(113

)

10,161

Integration Related Costs (c)

1,676

—

Legal Charges/Credits (d)

—

25,000

Restructuring and Other Charges (e)

5,528

(151

)

Gain on Sale of Assets (f)

(64

)

(7,818

)

FDA Mandated Product Recall (g)

7,500

—

UK Pension Settlement Charges (h)

2,769

—

Adjusted (Non-GAAP)

$

144,825

$

136,019

International Flavors & Fragrances Inc.GAAP to
Non-GAAP Reconciliation(Amounts in thousands)(Unaudited)

The following information and schedules provide reconciliation
information between reported GAAP amounts and non-GAAP certain adjusted
amounts. This information and schedules are not intended as, and should
not be viewed as, a substitute for reported GAAP amounts or financial
statements of the Company prepared and presented in accordance with GAAP.

Reconciliation of Net Income

(DOLLARS IN THOUSANDS)

Fourth Quarter

2017

2016

Income before taxes

Taxes on income (j)

Net income

EPS

Income before taxes

Taxes on income (j)

Net income

EPS

Reported (GAAP)

$

115,192

$

155,347

$

(40,155

)

$

(0.51

)

$

103,381

$

23,463

$

79,918

$

1.00

Operational Improvement Initiatives (a)

329

82

247

—

502

123

379

—

Acquisition Related Costs (b)

(113

)

(45

)

(68

)

10,161

3,575

6,586

0.08

Integration Related Costs (c)

1,676

574

1,102

0.01

—

—

—

—

Legal Charges/Credits (d)

—

—

—

—

25,000

8,750

16,250

0.20

Restructuring and Other Charges (e)

5,528

1,561

3,967

0.05

(151

)

7

(158

)

—

Gain on Sale of Assets (f)

(64

)

(20

)

(44

)

—

(7,818

)

(2,658

)

(5,160

)

(0.06

)

FDA Mandated Product Recall (g)

7,500

2,652

4,848

0.06

—

—

—

—

UK Pension Settlement Charges (h)

2,769

526

2,243

0.03

—

—

—

—

U.S. Tax Reform (i)

—

(139,172

)

139,172

1.76

—

—

—

—

Adjusted (Non-GAAP)

$

132,817

$

21,505

$

111,312

$

1.40

$

131,075

$

33,260

$

97,815

$

1.22

(a)

For 2017 and 2016, represents accelerated depreciation and idle
labor costs in Hangzhou, China. For 2016, also includes the partial
reversal of severance accruals related to prior year operational
initiatives in Europe. There was approximately $0.4 million of idle
labor costs in Hangzhou, China recorded during the 2016 that were
not excluded from Adjusted Non-GAAP metrics.

(b)

For 2017, represents the amortization of inventory "step-up"
included in Cost of goods sold and transaction costs related to the
acquisitions of Fragrance Resources and PowderPure within Selling
and administrative expenses. For 2016, represents the amortization
of inventory "step-up" included in Cost of goods sold and
transaction costs related to the acquisitions of David Michael
within Selling and administrative expenses.

(c)

Represents costs related to the integration of the David Michael and
Fragrance Resources acquisitions.

(d)

Represents additional charge related to litigation settlement.

(e)

Represents severance costs related to the 2017 Productivity Program
which were partially offset by the reversal of 2015 severance
charges that were no longer needed. For 2016, represents accelerated
depreciation related to restructuring initiatives and severance
costs related to the termination of a former executive officer and
the partial reversal of restructuring accruals recorded in the prior
year.

(f)

Represents gains on sale of assets. For 2016, assets sold were
principally in Brazil. During the first quarter of 2016, we
previously recognized approximately $3 million of gains related to
the sale of fixed assets. We have not retrospectively adjusted these
amounts out of our Adjusted Non-GAAP metrics.

(g)

Represents an estimate of the Company's incremental direct costs and
customer reimbursement obligations, in excess of the Company's sales
value of the recalled products, arising from an FDA mandated recall.

(h)

Represents pension settlement charges incurred in one of the
Company's UK pension plans.

(i)

Represents charges incurred related to enactment of certain U.S. tax
legislation changes in December 2017. The amount includes
approximately $38.6 million related to net adjustments on deferred
tax assets and $100.6 million related taxes on deemed repatriation
of earnings.

(j)

The income tax expense (benefit) on non-GAAP adjustments is computed
in accordance with ASC 740 using the same methodology as the GAAP
provision of income taxes. Income tax effects of non-GAAP
adjustments are calculated based on the applicable statutory tax
rate for each jurisdiction in which such charges were incurred,
except for those items which are non-taxable for which the tax
expense (benefit) was calculated at 0%. For fiscal year 2017, these
non-GAAP adjustments were not subject to foreign tax credits or
valuation allowances, but to the extent that such factors are
applicable to any future non-GAAP adjustments we will take such
factors into consideration in calculating the tax expense (benefit).

The Company tracks the amount of amortization recorded on recent
acquisitions in order to monitor its progress with respect to its
Vision 2020 goals. The following amounts were recorded with respect
to recent acquisitions: $0.785M related to PowderPure, $2,578M
related to Fragrance Resources, $1,131M related to David Michael,
$1,571M related to Ottens Flavors, and $2,067M related to Lucas
Meyer Cosmetics.

International Flavors & Fragrances Inc.GAAP to
Non-GAAP Reconciliation(Amounts in thousands)(Unaudited)

The following information and schedules provide reconciliation
information between reported GAAP amounts and non-GAAP certain adjusted
amounts. This information and schedules are not intended as, and should
not be viewed as, a substitute for reported GAAP amounts or financial
statements of the Company prepared and presented in accordance with GAAP.

Reconciliation of Gross Profit

(DOLLARS IN THOUSANDS)

Year Ended December 31,

2017

2016

Reported (GAAP)

$

1,479,001

$

1,399,070

Operational Improvement Initiatives (a)

1,802

2,391

Acquisition Related Costs (b)

15,860

7,648

Integration Related Costs (c)

480

—

Restructuring and Other Charges (f)

—

658

FDA Mandated Product Recall (i)

11,000

—

Adjusted (Non-GAAP)

$

1,508,143

$

1,409,767

Reconciliation of Selling and Administrative Expenses

(DOLLARS IN THOUSANDS)

Year Ended December 31,

2017

2016

Reported (GAAP)

$

557,311

$

566,224

Operational Improvement Initiatives (a)

—

(11

)

Acquisition Related Costs (b)

(4,529

)

(4,547

)

Integration Related Costs (c)

(3,258

)

—

Legal Charges/Credits (d)

(1,000

)

(48,518

)

Tax Assessment (e)

(5,331

)

—

Restructuring and Other Charges (f)

—

(1,364

)

UK Pension Settlement Charges (j)

(1,882

)

—

Adjusted (Non-GAAP)

$

541,311

$

511,784

Reconciliation of Operating Profit

(DOLLARS IN THOUSANDS)

Year Ended December 31,

2017

2016

Reported (GAAP)

$

581,443

$

567,356

Operational Improvement Initiatives (a)

1,802

2,402

Acquisition Related Costs (b)

20,389

12,195

Integration Related Costs (c)

4,179

—

Legal Charges/Credits (d)

1,000

48,518

Tax Assessment (e)

5,331

—

Restructuring and Other Charges (f)

19,711

322

Gain on Sale of Assets (g)

(184

)

(7,818

)

FDA Mandated Product Recall (i)

11,000

—

UK Pension Settlement Charges (j)

2,769

—

Adjusted (Non-GAAP)

$

647,440

$

622,975

International Flavors & Fragrances Inc.GAAP to
Non-GAAP Reconciliation(Amounts in thousands)(Unaudited)

The following information and schedules provide reconciliation
information between reported GAAP amounts and non-GAAP certain adjusted
amounts. This information and schedules are not intended as, and should
not be viewed as, a substitute for reported GAAP amounts or financial
statements of the Company prepared and presented in accordance with GAAP.

Reconciliation of Net Income

(DOLLARS IN THOUSANDS)

Year Ended December 31,

2017

2016

Income before taxes

Taxes on income (l)

Net income

EPS

Income before taxes

Taxes on income (l)

Net income

EPS (m)

Reported (GAAP)

$

537,045

$

241,380

$

295,665

$

3.72

$

523,717

$

118,686

$

405,031

$

5.05

Operational Improvement Initiatives (a)

1,802

450

1,352

0.02

2,402

599

1,803

0.02

Acquisition Related Costs (b)

20,389

6,514

13,875

0.17

12,195

4,117

8,078

0.10

Integration Related Costs (c)

4,179

1,331

2,848

0.03

—

—

—

—

Legal Charges/Credits (d)

1,000

354

646

0.01

48,518

17,089

31,429

0.39

Tax Assessment (e)

5,331

1,885

3,446

0.04

—

—

—

—

Restructuring and Other Charges (f)

19,711

5,465

14,246

0.17

322

97

225

—

Gain on Sale of Assets (g)

(184

)

(59

)

(125

)

—

(7,818

)

(2,658

)

(5,160

)

(0.06

)

CTA Realization (h)

(12,217

)

—

(12,217

)

(0.15

)

—

—

—

—

FDA Mandated Product Recall (i)

11,000

3,890

7,110

0.09

—

—

—

—

UK Pension Settlement Charges (j)

2,769

526

2,243

0.03

—

—

—

—

U.S. Tax Reform (k)

—

(139,172

)

139,172

1.76

—

—

—

—

Adjusted (Non-GAAP)

$

590,825

$

122,564

$

468,261

$

5.89

$

579,336

$

137,930

$

441,406

$

5.51

(a)

For 2017 and 2016, represents accelerated depreciation and idle
labor costs in Hangzhou, China. For 2016, also includes the partial
reversal of severance accruals related to prior year operational
initiatives in Europe. There was approximately $0.4 million of idle
labor costs in Hangzhou, China recorded during the 2016 that were
not excluded from Adjusted Non-GAAP metrics.

(b)

For 2017, represents the amortization of inventory "step-up"
included in Cost of goods sold and transaction costs related to the
acquisitions of Fragrance Resources and PowderPure within Selling
and administrative expenses. For 2016, represents the amortization
of inventory "step-up" included in Cost of goods sold and
transaction costs related to the acquisitions of David Michael
within Selling and administrative expenses.

(c)

Represents costs related to the integration of the David Michael and
Fragrance Resources acquisitions.

(d)

Represents additional charge related to litigation settlement.

(e)

Represents the reserve for payment of a tax assessment related to
commercial rent for prior periods.

(f)

Represents severance costs related to the 2017 Productivity Program
which were partially offset by the reversal of 2015 severance
charges that were no longer needed. For 2016, represents accelerated
depreciation related to restructuring initiatives and severance
costs related to the termination of a former executive officer and
the partial reversal of restructuring accruals recorded in the prior
year.

(g)

Represents gains on sale of assets. For 2016, assets sold were
principally in Brazil. During the first quarter of 2016, we
previously recognized approximately $3 million of gains related to
the sale of fixed assets. We have not retrospectively adjusted these
amounts out of our Adjusted Non-GAAP metrics.

(h)

Represents the release of CTA related to the liquidation of a
foreign entity.

(i)

Represents an estimate of the Company's incremental direct costs and
customer reimbursement obligations, in excess of the Company's sales
value of the recalled products, arising from an FDA mandated recall.

(j)

Represents pension settlement charges incurred in one of the
Company's UK pension plans.

(k)

Represents charges incurred related to enactment of certain U.S. tax
legislation changes in December 2017. The amount includes
approximately $38.6 million related to net adjustments on deferred
tax assets and $100.6 million related taxes on deemed repatriation
of earnings.

(l)

The income tax expense (benefit) on non-GAAP adjustments is computed
in accordance with ASC 740 using the same methodology as the GAAP
provision of income taxes. Income tax effects of non-GAAP
adjustments are calculated based on the applicable statutory tax
rate for each jurisdiction in which such charges were incurred,
except for those items which are non-taxable for which the tax
expense (benefit) was calculated at 0%. For fiscal year 2017, these
non-GAAP adjustments were not subject to foreign tax credits or
valuation allowances, but to the extent that such factors are
applicable to any future non-GAAP adjustments we will take such
factors into consideration in calculating the tax expense (benefit).

(m)

The sum of these items does not foot due to rounding.

The Company tracks the amount of amortization recorded on recent
acquisitions in order to monitor its progress with respect to its
Vision 2020 goals. The following amounts were recorded with respect
to recent acquisitions: $2,011M related to PowderPure, $6,989M
related to Fragrance Resources, $3,991M related to David Michael,
$6,285M related to Ottens Flavors, and $7,831M related to Lucas
Meyer Cosmetics.

NEW YORK --(BUSINESS WIRE)--Oct. 15, 2018-- Regulatory News : International Flavors & Fragrances Inc. (NYSE:IFF) (Euronext Paris: IFF) (TASE: IFF), a leading innovator of scent, taste, and nutrition, announced that it will release its third quarter 2018 earnings results following the market close